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Anyone who has money deposited in their local bank knows firsthand that earning any reasonable return on these funds has been an exercise in futility the last few years.

So perhaps a better strategy is to own a piece of these institutions — as well as other firms in the financial services sector.

Also, investing in medium-sized firms makes good sense — midcap stocks are not as widely followed by Wall Street, and that allows good stock pickers to find value in names that are often overlooked by the masses.

American Century Mid-Cap Value

American Century Mid-Cap Value (ACMVX) is led by Phil Davidson, who has a superb track record at this fund. The fund is up 22% during the past year and is ranked in the top 18% of its category by Morningstar during the past five years, returning 10.9% annually over the period. That performance has helped drive roughly $4.3 billion in assets under management.

Risk is always a calculation when considering investment choices — a fact that I keep in mind in The Relevant Investornewsletter. This fund is a lower-risk choice among stock funds, with a beta of 0.91.

ACMVX is a no-load fund that charges 1% in expenses, or $100 for every $10,000 invested.

Fidelity Mid-Cap Value

Manager Court Dignan is relatively new to Fidelity Mid-Cap Value (FSMVX), but has the fund performing well — up a strong 30% during the past year.

Once again, exposure to the financial services sector is a big factor with 20% of the fund in these names. Recent top holdings include: M&T Bank (MTB), Hartford Financial Services Group (HIG), Cigna (CI), Fifth Third Bancorp (FITB) and SLM (SLM).

Fidelity does tend to change managers with some frequency, but the depth of the research team is impressive and a definite positive here. Mr. Dignan previously managed Fidelity’s Select Insurance Portfolio and shows potential in this new assignment, which currently has $1.4 billion in AUM.

FSMVX charges 0.81% in expenses.

Vanguard Selected Value

Vanguard Selected Value (VASVX) remains a compelling choice with an excellent pedigree. This fund employs two sub-advisers, and it is an arrangement that seems to be working out well.

Most of the fund’s assets are managed by James Barrow and Mark Giambrone of Barrow, Hanley, Mewhinney & Strauss LLC. The firm of Donald Smith & Co. handles a lesser portion of the fund’s substantial $6.1 billion in assets.

While there are drawbacks to the multi-manager approach, it is hard to argue with the results here. During the past year, the fund is up a substantial 36% and has gained 12.2% annually during the past five years.

Even with two managers, this fund only owns 66 stocks — so this is very much a concentrated portfolio. A full 27% of the fund is invested in financial services stocks, though many of its top holdings are outside of that sphere. Recent top weights go to XL Group PLC (XL), Royal Caribbean Cruises (RCL), Hanesbrands (HBI), Omnicare (OCR) and Pentair (PNR).

Banks may not be popular with depositors right now, but the right funds focused on the financial services sector may continue to enrich investors as the recovery in this industry marches forward.

Expenses are a mere 0.38%, and turnover of just 18% also helps keep the fund’s costs down.

As of this writing, Bill Wysor did not hold a position in any of the aforementioned securities.